London tops LaSalle’s European regional growth index

London is the number one ranked city for the second consecutive year in LaSalle’s European Regional Growth Index 2013, which assesses the strength of occupier demand for real estate in the medium term.

London's strong performance in the E-REGI index is reflected in the real estate market with office rental growth in the City of London and West End forecast to be one of the strongest of the major markets in Europe over the next five years.

Mahdi Mokrane, LaSalle Investment Management’s head of research & strategy, said: 'Despite a few high-profile development schemes in the UK capital, vacancy for good space will remain constrained and blue-chip companies and top retailers will continue to target London as a preferred location. We have also seen international investors positioning London above most other cities in the world though increasing prices are slowly forcing capital into higher yielding markets.'

Paris is also on the podium, marginally behind Oslo, driven by its dynamic and well diversified economy and R&D expenditure. As the major economic centre of France, generating one third of the nation’s wealth, it remains a focus for property investors at home and abroad.

Mokrane continued: 'Paris has been consistently in the top four E-REGI status since the early 2000s, in keeping with its real estate market’s international reputation. It remains the second choice after London for international real estate investors looking at Europe and consistently undertakes more office transactions than the top tier of German cities combined. We believe the medium term prospects for occupier demand and rental growth in the under-supplied sub-markets of Paris is robust.'